MARKET REPORT: Building delays take a toll on Balfour Beatty with the firm posting £23m in losses
Shares in Balfour Beatty took a beating after hitches with a number of its central London projects wiped out its UK profits. The group’s UK arm posted a £23m loss in the first six months of the year.
The HS2 and Hinkley Point C contractor said Covid-related disruption was taking a toll and dragging out how long it is taking to complete work.
The industry is juggling delays in supply chains caused by an HGV driver shortage, overstretched shipping operations and rising costs, which are all chipping away at already-thin margins.
Shares in Balfour Beatty took a beating after hitches with a number of its central London projects wiped out its UK profits
As a result of the bruising first half, Balfour Beatty has said that it will not bid for fixed-price residential property projects in central London. It also revealed it faces having to pay around £50m to fix a stone panel facade on a London highrise block it built in 2016.
Profits hit £35m, contrasting with a £26m group loss in the same period of last year. This included several months when work at many sites halted. Revenue was broadly flat at £4.2bn. The company’s coffers were helped by its US and Hong Kong businesses.
The swing to a £35m profit has led the infrastructure firm to reinstate its dividend. It pledged to pay 3p for the first half, a rise of 43pc from the pre-pandemic figure for 2019. But it tumbled to the bottom of the FTSE 250 leaderboard – falling 7pc, or 22.4p, to 296.6p.
Meanwhile, mining titan BHP made its own tumble to the bottom of the FTSE 100 leaderboard. Traders were nervy after BHP unveiled plans on Tuesday to unify its dual structure into a company that is listed primarily in Australia. Although people will be able to trade BHP’s stock in London, it will no longer be in the Footsie, meaning index tracker funds will have to sell their stock if the plan is approved by investors.
A slowdown in the global economy would soften demand for the raw materials they produce. Rio Tinto fell 2.6pc, or 141p, to 5338p
Some have already started. BHP dipped 5.9pc, or 140p, to 2218p, while other major miners also lost ground as fears increased about the spread of the Delta variant. A slowdown in the global economy would soften demand for the raw materials they produce.
STOCK WATCH: LoopUp
LoopUp surged after receiving what boss Steve Flavell described as a ‘badge of honour’ from Microsoft. The tech giant has given the AIM-listed conference call service provider the catchily named ‘Calling for Microsoft Teams Advanced Specialization’ award.
The accolade is given to Microsoft partners that demonstrate extensive experience managing the Teams calling and phone system. Teams was one of the most popular platforms used to hold meetings when people had to work from home during the pandemic. Shares rose 3.9pc,or 1.45p, to 38.95p.
Rio Tinto fell 2.6pc, or 141p, to 5338p, Evraz by 2.1pc, or 12.2p, to 559.8p and Anglo American by 2.3pc, or 73p, to 3235.5p. Gold miner Hochschild eked out a gain, with shares rising 0.3pc, or 0.5p, to 152p, as it reported a surge in profit and turnover in the first half of the year.
Payment services provider Network International also advanced after it said turnover this year would eclipse 2019 levels. The Dubai group was the biggest mid-cap mover – lifting 11.3pc, or 39.7p, to 392.3p – after profits rocketed from £870,000 to £12.4m.
The stock market darling of 2020 – Novacyt – was among the top risers on AIM after it said the boom in private Covid testing helped drive revenue 50pc higher. It made £95m in the first half, of which £41m was from the Department of Health and Social Care (DHSC). It has won a new contract worth up to £4.7m to supply the NHS with test kits and entered a two-year agreement with the World Health Organisation. It was a big ‘pandemic winner’ last year after Primerdesign, a division in Southampton, rapidly built and designed some of the world’s first Covid tests.
At one point, Novacyt’s value had risen by around 10,000pc on the start of the year. Yesterday, it finished up 20.3pc, or 61.4p, at 363.4p. The junior market listed-group, based in Paris, warned in April that a DHSC contract was in dispute. This is ongoing, it said, but it still expects turnover from nonDHSC contracts to be around £100m this year.